AstraZeneca in emerging markets deal

City A.M. Reporter
ASTRAZENECA is stepping up its footprint in emerging markets through a branded generics supply deal with Indian group Torrent Pharmaceuticals that mirrors similar tie-ups by other big pharma groups.

The Anglo-Swedish company said yesterday that Torrent would supply it with a portfolio of generic medicines for which Torrent already has licences in a range of countries.

AstraZeneca – which will host an investor day on 16 March to highlight its plans for emerging markets – intends to use its own brand to sell these products in developing world markets where it already has a strong commercial footprint.

The deal will initially cover 18 products in nine countries and this is expected to grow over time. Financial terms were not disclosed.

The world’s major drugmakers are focusing on emerging markets as a new business area as growth slows in the West and many blockbuster medicines lose patent protection. Cheaper branded generics provide a key way in for these new markets.

Emerging markets are forecast to contribute around 70 per cent of pharmaceutical industry growth in the next five years and branded generics represent approximately 50 per cent by value in these markets, AstraZeneca said.

Analysts at Shore Capital said AstraZeneca generates around 13 per cent of annual revenue in emerging markets.